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Town awaits pulp mill’s fate |
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Written by GORDON HOEKSTRA
Citizen staff
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Thursday, 12 June 2008 |
A key question in the embattled community of Mackenzie is whether a buyer will be secured for the bankrupt Pope and Talbot pulp mill, with residents hoping a sale will put a few hundred people back to work.
"I'm hoping people won't be disappointed. That would be another kick in the teeth," Mackenzie Mayor Stephanie Killam said Thursday.
The forest-based community of 4,700 has seen 1,500 forestry jobs disappear, half of its workforce in an unprecedented forestry downturn led by a collapse in U.S. housing.
Unlike money-losing lumber, pulp prices are high enough for producers to turn a profit.
However, the pulp mill was idled -- putting most of the 260 workers off the job -- when Pope and Talbot went into receivership last month.
Now, an outstanding issue in Mackenzie, 175 kilometres north of Prince George, is whether there is enough wood fibre to run the pulp mill given the shut down of sawmills, which traditionally supply wood chips to pulp mills.
The last major sawmill in Mackenzie -- and a key supplier of wood chips to the pulp mill -- was shut down indefinitely by Vancouver-based Canfor on Thursday.
Bids for the Mackenzie pulp mill, another pulp mill in Nanaimo and a sawmill in Fort St. James were closed on Tuesday by receiver PricewaterhouseCoopers.
There is some expectation the bankruptcy proceedings will reconvene today in B.C. Supreme Court in Vancouver. A key issue is Canfor's efforts to get out of its wood fibre supply agreement with Pope and Talbot.
Forest industry analyst Paul Quinn -- who believes a buyer will purchase the pulp mill in Mackenzie -- said the wood fibre supply is going to be a key issue in Mackenzie. "You really have to have that fibre locked up to be able to buy that mill, and fibre is not available right now," said Quinn, an analyst with RBC Capital Markets.
In the long term, however, the prospects for the forest base in Mackenzie are more positive, particularly given the higher percentage of spruce there than in other Interior areas, observed Quinn. Spruce is considered a valuable tree species because lodgepole pine, the predominant commercial species in the Northern Interior, is being killed by a widespread mountain pine beetle epidemic.
"You are not going to be taking out wood from there and driving to Prince George -- it's not going to happen because it doesn't make sense," said Quinn. "So, I think there's a forest economy there. It's just the market is so brutal now, it's not right now."
Veteran pulp mill worker Rick Berry said he continues to be optimistic for an imminent sale of the pulp mill. He acknowledged there are issues with wood chip supply, although he didn't see how Canfor can get out of its requirement to supply wood chips to the mill. Berry said there is also the potential to chip whole logs, which should be economical given the high price of pulp.
Analysts are predicting that pulp will remain strong this year. Prices are near US$900 a tonne in North America, and over that level in Europe, far surpassing the last peak in 2001.
United Steelworkers Local 1-424 official Brian O'Rourke said the sale of the sawmill in Fort St. James is also a key issue for the community, 160 kilometres northwest of Prince George. The sawmill, shut down since mid-October last year, employed about 280 workers.
The union hopes to get answers soon about a buyer, but O'Rourke believes it could be up to two weeks before any definitive answer is revealed.
He also observed it will be tough to sell the pulp mill in Mackenzie without a secure wood chip supply. He noted that potentially the wood chip supply could come from the Fort St. James sawmill.
Fort St. James has also been hit hard by the forestry downturn. Stuart Lake Lumber has been closed since last summer, and other lumber producers are working on reduced shifts.
The United Steelworkers, as well as Fort St. James community leaders and First Nations, have stressed they want to see the sawmill sold to a company that is interested in operating the sawmill. The groups have said they won't tolerate a company moving the logs out of their community.
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SIDEBAR
While the big forest operators in Mackenzie have closed, at least one smaller company, East Fraser Fiber, continues to operate.
"We're going to keep running," said company president Patrick Glazier said Thursday.
The company makes finger-jointed boards by gluing smaller pieces from the trim blocks from primary sawmills to produce a premium-grade lumber. Canfor, which closed its remaining sawmill in Mackenzie on Thursday, was one of East Fraser's trim block supplier, but not its only one, noted Glazier.
He also said the secondary manufacturer has about a one-month supply of trim blocks.
Glazier said it was weird to be the biggest remaining forest products employer in Mackenzie with about 40 workers.
More than 1,200 mill workers are off the job in Mackenzie.
The shuttered plants include Pope and Talbot's pulp mill, AbitibiBowater's newsprint mill and two sawmills, and Canfor's sawmill. The job losses include those from a shift reduction at East Fraser.
Another estimated 300 loggers and truckers are off the job as well.
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Last Updated ( Wednesday, 08 October 2008 )
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